Two Investing Virtues: Dividends and Patience

It’s about this time of year I try to put the past 12 months in perspective and see how my active trading is doing against the market.  I always figure if I can’t substantially outperform buy-and-hold, I shouldn’t be actively doing anything.

As you can see below, the market hasn’t really given the buy-and-hold crowd much to cheer about.  Using the NYSE as a proxy (the best, and broadest measurement, in my opinion), you can see it’s been a choppy year, that’s yielded about 10%

So, if your portfolio hasn’t done much, it’s probably not your stocks, but the market’s malaise!

Yet, while my active trading has done better than the market, ironically, so has my buy-and-hold stuff.  There, the key I focus on is solid stocks that throw off a decent dividend.

Two good examples are General Electric (NYSE:GE) and Mattel (NYSE:MAT).  Both stocks are considered kind of boring, but look at how they’ve done.

MAT has performed even better, and adding in dividends, the gain is nearly 37%.

Remember, trading or investing doesn’t have to be flashy.  You don’t have to “do something” each and every day.  Just pick quality stocks and be patient.  Usually that’s enough to outperform the broader market.